This morning brought the announcement that AOL will purchase NY based video firm 5min. The price of the acquistion is still unknown, although for what it’s worth, Peter Kafka at All Things D just tweeted it was likely $65 million.
5min started life in 2007 as a hub for instructional videos, but there were simply too many destination sites to compete with. So 5min transitioned into the much more profitable business of syndication. A website about dogs, for example, pays 5min a fee to provide them with videos about dogs matched to the content of their articles. According to Comscore, 5min is now the web’s largest syndicator of video.
The move is part of AOL CEO Tim Armstrong’s strategy to become one of the new content kings on the web. 5min will allow AOL to expand its video library, increase rates from advertisers and find new outlets for its own original video.
“No one watches instructional videos for fun,” says CEO Harnevo. “That’s the fundamental difference between 5min and the big video portals. When someone watches a “How to make magarita” video, you know a lot about him. He’s not watching it for fun. He’s having a party tonight, or he just likes to drink. Either way for the advertiser it’s really useful.”
You see, no matter who this guy is or what website he’s watching on, he could still use a new blender, ice tray or reminder not to drink alone.